How to start a trades business
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Whether you want to become a plumber, electrician, painter, tiler, landscaper or any other type of tradesperson, the people at the University of Western Sydney have put together great guides on what to think about when starting your trades business. Read on for an overview of what they cover.
The University of Western Sydney have put together a great series of guides on every aspect of starting a trades business.
These aren't guides on how to hold a paintbrush, or how to lay pavers, they are guides on how to run a business. How to take your trade and turn it into a fully fledged business. Hopefully a business that employs lots of people and makes tonnes of profits.
The guides cover all of the key aspects of starting a trades business. Typically the guides are broken up into 7 aspects of creating and running your trades business. They are:
1. Startup
The startup section covers key information about starting your trades business including:
- Industry Information
- Skills, Qualifications & Experience
- Licences & Permits
- Facilities, Equipment & Vehicles
- OH&S
- Buying a business versus starting your own
- Planning
2. Registration & Compliance
This covers both the registration of your business or company as well as the compliance requirements that your trade business must meet, including:
- Understanding business structures
- Understanding tax obligations
- Understanding superannuation
- Understanding insurance
- Understanding business licensing
- Are you an employee or a contractor?
3. Sales & Marketing
Once you have a business that is fully registered and compliant, then you need clients, they're the ones that pay the bills! Marketing attracts potential customers, and your sales skills help you turn them into real paying customers. The guide covers:
- Understanding Marketing
- Advertising & Promotion
- Networks & Contacts
- Selling Tips
Encouragingly, the one of the Tips in the Selling Tips section is that you consider joining Service Central.
4. Pricing & Quoting
Its great to see that the University of Western Sydney have dedicated a whole chapter to Pricing and Quoting. All too often new tradespeople turn up to quote on their first job without any clear strategy as to how they are going to price the job. Are you going to charge for labour and materials, per square metre or a set job rate? How are you going to ascertain what is the right price? How do you know what the going market rate is?
This guide gives you an overview of:
- Types of pricing
- Calculating Breakeven and Profit Margins
- Estimating a job
- Material Costs
- Variations & Additions
5. Operational Management
Once you have won the work its time to get down and dirty and get the job done. This is where you really make your money, if you're able to keep your operational costs below how much you quoted then you will make a profit.
The operational management guide covers:
- Administration
- Quality Issues
- Safety Issues
- Wage Rates
- Employment Information
- Accounting
- Cash Flow Management (i.e. Making sure you have enough cash in your bank to pay your bills)
- Risks to your business
- Calculating earning potential
- Home Warranty Insurance
6. Getting Paid
Customers are great! And, paying customers are even better!
Take a look at:
- Types of payments
- Upfront payments / deposits
- Progressing payments
- Full payment on completion of job
- Retention payments
- Valid invoicing
- Managing payment risks
- Legislation protecing you
- Subcontractor statements
7. Paying taxes
They said that there is nothing certain in life except for death and taxes.
The final chapter of the guide to starting a trades business covers:
- Income Tax
- GST
- PAYG
- FBT
- Payroll Tax
- Superannuation
- Business Activity Statement (BAS)
And that's it, a great series of guides to help you get a basic understanding of every aspect of starting and running a trades business.
Each guide is tailored towards the type of business that you wish to start, the guides include:
- Guide to starting a wall & floor tiling business
- Guide to starting a carpentry business
- Guide to starting an excavation business
- Guide to starting an electricians business
- Guide to starting a painting business
- Guide to starting a pest control business
- Guide to starting a concreting business
- Guide to starting a plumbing business
- Guide to starting a landscaping business
- Guide to starting a glazier business
The team at Service Central wish you well in your journey as you start your new trades business. Starting a business is never easy, however the rewards are great. Hopefully these great guides from the University of Western Sydney help you in that journey.
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